BAC/MER Has Ordered Traders Not To Enter Into Trades With BP

Discussion in 'Stocks' started by Tauvros, Jun 15, 2010.

  1. ammo

    ammo

    dr p ,on your chart at the bottom,last time the cot was that high,we sold off,am i reading it wrong,mid 08
     
    #11     Jun 16, 2010
  2. Wonder who would leak this, and what would be their motivation.
     
    #12     Jun 16, 2010
  3. You are correct, except for one big difference. The weekly trend was down at that time and it is up now.

    Normally, commercial traders buy low and sell high. Commercial traders either produce oil or purchase it in large quantities. Therefore, companies that sell gasoline buy all the way down in a downtrend as prices get cheaper knowing that they can make money when the price rises in the future. Oil producers sell their stored inventory all the way up in an uptrend as prices rise. As a result, the COT commercial index should be high (indicating commercial buying) as prices decline and low as prices rise (indicating commercial selling).

    However, when commercial traders (smart money) get long in an uptrend, that is opposite of what should be happening and indicates that the commercials believe that, even though oil is at a high price, it will be going higher. Add this fact to the seasonal tendency for oil to rise in price, technical analysis showing a completed pullback and the fundamental fact that we are in the middle of the largest oil spill in history and we have all of the ingredients for a big oil rally sometime this summer, IMHO.
     
    #13     Jun 16, 2010
  4. ammo

    ammo

    thanks doc
     
    #14     Jun 21, 2010